What America needs is shock therapy

Jeffrey Simpson, Opinion, The Globe and Mail:

The U.S. spends way more than it raises in revenue and, therefore, borrows massively; it imports more than it exports; it has an almost double-digit unemployment rate (9.2 per cent); it has the highest degree of inequality in the Western world; its public pension plan isn’t adequately financed.

Americans can blame foreigners if they want for some of these problems – currency manipulation by China, unfair trading practices, companies shipping jobs offshore – but they’re mostly responsible for their own problems. Systematically, Americans have refused to tax themselves at levels commensurate with their spending. The result of this collective irresponsibility has finally caught up with them.

They waged wars while cutting taxes, as in Iraq and Afghanistan under George W. Bush’s disastrous regime. They let the Pentagon budget explode, raised the costs of public health care (as in Mr. Bush’s unfunded drug plan for seniors), kept the cost of gasoline below that of any Western country, left the financial sector largely unregulated until its excesses brought the economy to its knees, and designed an immensely costly and, in many respects, quite foolish Homeland Security apparatus.

The Tea Party has no coherent answer for anything. It exists to cut government and, as such, reflects a conservative view that the best way to shrink government is to starve it. Eventually, went this line of thinking, the deficit/debt problem would become so intractable that, as long as taxes weren’t raised, the only available option would be to slash spending – which is what’s happening now in Washington and at the state level.

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